The EFF is recommending that users do not use the new Google Desktop because it greatly increases the risk to consumer privacy. It seems that the the new “Search Across Computers” feature will send copies of one’s local documents to Google’s servers so that they can be searched by the user from, say, their work computer.
The trouble is that due to the provisions of the Electronic Communication Privacy Act of 1986, there are fewer legal protections on one’s files when they are stored with an online service provider (OSP) as opposed to when they are stored on your home computer. To access your home computer, the government would require a search warrant; to access files at an OSP they would only need a subpoena. A subpoena issued directly to an OSP could mean that you might not even be notified.